(T2108 measures the percentage of stocks trading above their respective 40-day moving averages [DMAs]. To learn more about it, see my T2108 Resource Page.)
T2108 Status: 50% and Neutral
General Trading Call: Hold.
Commentary
T2108 is approaching its lows from last month while the S&P 500 remains above its 50DMA and 2.7% away from retesting the April lows. The spillover from the commodity sell-off seems to be gaining some momentum, so I am guessing that T2108 will get into the 30-40% range before this current market swoon ends. Note well that the stock market’s general uptrend remains intact given the upward sloping 50 and 200DMAs (not shown). Moreover, April’s swoon ended well above the lows of March and May’s high was a multi-year high. In other words, the market’s bias remains up until the April and then the March lows are breached.
Having said that, the stock market made a new closing low for the month representing the first technical breach in favor of the bears. New shorts should be executed into rallies; tight stops should be used in case the stock market is finally making another run for overbought levels. Otherwise, short-term/swing traders should hold their positions.
Charts below are the latest snapshots of T2108 (and the S&P 500).
If the charts appear old, refresh your browser.
Daily T2108 vs the S&P 500
Black line: T2108 (measured on the right); Red line: S&P 500 (for comparative purposes)
Weekly T2108
*All charts created using TeleChart:
Related links:
The T2108 Resource Page
Expanded daily chart of T2108 versus the S&P 500
Expanded weekly chart of T2108
Be careful out there!
Full disclosure: long SSO puts